Conversion of land to pasture has contributed to 70,000 hectares of native vegetation loss from 1996 to 2012, and over 1000 hectares of wetlands since 2001, according to the report.

"It is undeniable that the dairy industry deserves the title of the dirtiest industry in New Zealand, and urgent action is required," Greenpeace senior campaign and political advisor, Steve Abel, said on Thursday.

"To turn this around, the Government must institute policies that will lead to land use change, get rid of synthetic nitrogen fertiliser, dramatically reduce cow numbers, and invest millions into regenerative farming."

Due to pathogens, 82 percent of river length in pastoral farming areas is not suitable for activities such as swimming. And there is "clear evidence" of farming areas having "markedly higher pollution" - even faecal bacteria.

Nearly half of climate pollution in 2016 came from agriculture, the report says. And almost 95 percent of all nitrous oxide emissions were from agricultural soils - mainly from the urine and dung of grazing animals.

Greenpeace has blasted the dairy industry.
Photo credit: File

The dairy industry has responded to the report by insisting environmental protection is a top priority. Dairy NZ's strategic leader for the environment, Dr David Burger, said farmers are working hard to look after it.

"The Environment Aotearoa report helps us understand the changes over time. There are some areas where more work needs to happen or where current initiatives will take time to deliver results."

He said the industry has a "clear vision" to improve the environment, and said that's why Dairy NZ is "actively in the community, talking about the role we all play".

"We have been on a journey for many years to look after the environment... Cow numbers have now stablilised so our focus is managing our farm systems more sustainably."

He pointed to the Dairy Tomorrow sector strategy launched in 2017 which includes a commitment by dairy to protect the environment for future generations, including leading efforts to improve river and stream health.

"Water quality is a big one for us but we all have to acknowledge it is a really complex issue, as also highlighted by the report."

But Abel isn't convinced the dairy industry is doing enough to turn the tide. He said the industry has been pushing a narrative of "cleaning up their act", when the environmental statistics continue to show otherwise.

"The biggest degradations in New Zealand's environment in recent years have been caused by the dairy industry."

He slammed the Government's announcement on Wednesday that it would not introduce a fertiliser tax, and said it's an indication the country is heading in the wrong direction.

"As a nation reliant on an international reputation of being clean and green, we're failing pretty epically."